Shell to commence work on China gas project this year

19 March 2018, Sweetcrude, Lagos – The Royal Dutch Shell and its production sharing contract partner, China National Petroleum Company, CNPC, are expected, in the second half of this year, to commence work on the second phase development of the Changbei tight gas play in northern China’s Ordos basin, where the overall development plan, ODP, was put in place about three years ago.

This follows last week’s final investment decision, FID, on the project by the oil super major. But the commencement of work would be after government approval of the environment impact assessment and land use.

As part of the ODP, Shell would be building 26 wellpads and carrying out infill drilling at two existing wellpads and four injection wells. Other offsite facilities include three gas gathering stations and one liquid treatment plant, as well as export pipelines.

The new development phase is expected to come on stream in about two years, and will be able to produce about 2.4 billion cubic metres per annum of gas at its peak.

The new development is expected to centre around the northern part of the play and would not extend beyond the borders outlined in the initial production sharing contract signed in 2005.

CNPC, in 2016, took over the operatorship of Changbei’s first phase, while Shell retains 49%. However, Shell will act as operator of the field’s second phase development.